Costa Coffee’s Growing Losses Put Coca-Cola’s Big Bet Under Pressure
There’s been a lot of quiet concern building around Costa Coffee lately, and now the numbers are making that concern hard to ignore. The latest financial results show that losses at the high street coffee chain have more than doubled, adding fresh pressure on its owner, Coca-Cola, as it searches for a new buyer.
According to accounts filed with Companies House, Costa Coffee’s operating loss widened sharply, rising from £5.8 million in 2023 to £13.5 million in the year ending December 2024. These losses were largely driven by what the company described as “challenging conditions,” with fewer people coming through the doors and growing competition from cheaper, value-focused rivals. In simple terms, footfall has been softer, and customers are being far more careful about how much they spend on their daily coffee.
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What makes the situation more striking is that sales actually edged up. Revenue rose by about 1 per cent to £1.2 billion over the same period. So while money is still coming in, rising costs and competitive pressure mean profits are being squeezed harder than ever. Costa, which was founded in London in 1971 by Italian brothers Bruno and Sergio Costa, now runs around 2,700 cafés across the UK and Ireland. But being big hasn’t protected it from a rapidly changing coffee market.
Cheaper chains like Greggs have been winning over budget-conscious customers, while Pret has responded with meal deals designed to keep people spending less. At the same time, newer and trendier brands such as Blank Street and Black Sheep Coffee have been pulling in younger consumers with drinks like flavoured matcha lattes that are particularly popular with Gen Z. Costa has found itself caught in the middle, neither the cheapest option nor the trendiest name on the high street.
On top of that, costs across the industry have continued to climb. Higher wages, increased National Insurance contributions, and stubborn inflation in coffee bean prices have all added to the strain. These pressures have made it harder for Costa to turn rising sales into meaningful profits.
Against this backdrop, Coca-Cola is believed to be looking to sell the business for around £2 billion. That figure is a long way below the £3.9 billion it paid when it bought Costa from Whitbread back in 2018. Talks with private equity firm TDR Capital, which had been seen as a preferred bidder, are thought to have stalled over price disagreements.
Even Coca-Cola’s leadership has acknowledged the disappointment. Last year, chief executive James Quincey admitted that the Costa acquisition had “not quite delivered” and was falling short of expectations from an investment point of view. For now, Costa Coffee remains a well-known brand facing a tough reality, as its future ownership and long-term direction hang in the balance.
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